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How to hold a successful tax refund sale

Tax refund season is here, and 29 percent of Americans plan to use their tax refunds to buy something, according to a Credit Karma survey reported by The Motley Fool. Here’s the breakdown:

11% will spend their tax refunds on vacation, travel or a major event such as a wedding

10% will spend it on a major purchase, such as a home, car or boat

6% will buy something else for themselves

2% will buy something for their significant other

Those statistics mean tax refunds are good business for the retail, travel, event and services industries.

In addition, the majority of Americans will sock their tax refunds into savings or use it to pay off debt – which means tax refunds also present opportunities for the financial sector. Here’s how it breaks down:

20% will put their tax refunds into savings

18% will put it toward credit card debt

16% will put it toward other debt

6% will put it toward student debt

3% will put it toward medical debt

3% will put it in a family member’s bank account

The bottom line: tax refunds are good for business, and now is the time to launch a tax refund sale so you can cash in. Use the following tips to hold a successful tax refund sale.

Market early and often

The early bird gets the worm, and you can beat your competitors to the punch by marketing your tax refund sale early. Start by consulting the IRS tax refund schedule, which shows that tax refunds for those who e-file and request direct deposit start in mid-February – two months ahead of the April filing deadline.

Repetition is key to a successful campaign, so your best bet is to time your marketing with the refund schedule dales. For example, you might:

Print promotional flyers and distribute them locally around April 9 – the approximate refund date for people who e-file by March 15 and request a paper refund

Send another round of postcards around May 30 – the approximate refund date for people who paper file by April 17 and request a direct deposit refund

Print vinyl banners to place in strategic local hotspots around June 9 – the last approximate refund date

Target your marketing to people who get big refunds

You know you need to target your marketing to likely customers, and you know your tax refund marketing should present a great deal on a desirable way to spend tax refunds. But, have you considered who gets the most tax refunds?

For some businesses, it might make sense to target married couples or those with children – especially if there is a natural tie-in to your offer. For example, tax refund season is a great time to promote a family vacation deal: the tax refund makes the vacation affordable, families love to take vacations, and April is a good time to start planning summer vacations. The stars align!

Make your offer relevant

Your offer should be relevant to your audience’s desires (see the family vacation idea above), but you should also make it relevant to their tax return. Consider this: in 2017, the average tax refund in America was $2,895.

That’s a good number to know, because you can make your offer fall within that figure. For example, let’s say you want to promote a family vacation package. If the price is $5,000, the average tax return won’t cover it; however, if it’s less than $3,000, it might be more attractive since the average tax return will pay for it in its entirety.

What about big ticket items such as cars, boats and houses? You can make the down payment less than the average tax return, and add incentives such as doubling the down payment to lend the perception that their money will go further – if they buy now.

The bottom line is your tax refund sale should draw the connection between how much money your audience will receive and how they can spend it – without needing to immediately dig into their savings. This is “extra” money, so make it easy for customers to spend it guilt-free.

About Brian Morris

Brian Morris serves in various capacities as a freelance writer, content developer and public relations specialist for growing small businesses. When he’s not writing, he can be found on the racquetball court - usually getting his tail kicked by guys 20 years older.

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